Required information C4-6 Recording/Posting Transactions and Adjustments, and Preparing Trial Balances and Financial Statements-Requires Calculating Depreciation and Interest (Chapters 2, 3, and 4) (LO 2-3, LO 3-3, LO 4- 2, LO 4-4] Fast Deliveries, Inc. (FDI), was organized in December last year and had limited activity last year. The resulting balance sheet at the beginning of the current year is provided below: FAST DELIVERIES, INC. Balance Sheet at January 1 Assets: Liabilities: Cash $12,600 Accounts Payable $ 700 Accounts Receivable Stockholders' Equity Supplies 720 Common Stock 11,900 Retained Earnings 1,320 Total Assets $13,920 Total Liabilities and stockholders' Equity $13,920 600 Two employees have been hired at a monthly salary of $2.960 each. The following transactions occurred during January of the current year. Ch. January 2 2 2. 2 3 56,000 is paid for 12 months insurance starting January 1. (Record as an asset. $4,800 is paid for 12 months of cont beginning January 1. (Record as an asset.) FDI borrows $30,000 cash from State Bank at 5% annual interest; this note is payable ch January 1 WN NNN wwwwNNNNN 4 5 6 7 8 9 10 16 2e $6,000 is paid for 12 months' insurance starting January 1. (Record as an asset.) $4,8ee is paid for 12 months of rent beginning January 1. (Record as an asset.) FDI borrows $30, eee cash from First State Bank at 5% annual interest; this note is payable in two years. A delivery van is purchased using cash. Including tax, the total cost was $28,888. Stockholders contribute $4,000 of additional cash to FDI for its common stock. Additional supplies costing $1,40e are purchased on account and received. $7ee of accounts receivable arising from last year's December sales are collected. $300 of accounts payable from December of last year are paid. Performed services for customers on account. Sent invoices totaling $10,680. $7,400 of services are performed for customers who paid immediately in cash. $2,968 of salaries are paid for the first half of the month. FDI receives $3,700 cash from a customer for an advance order for services to be provided later in January and in February. $3,500 is collected from customers on account (see January 9 transaction). 3 3 25 Ch. 4 4 4 4 January Additional information for adjusting entries: 31a A $1,100 bill arrives for January utility services. Payment is due February 15. 31b. Supplies on hand on January 31 are counted and determined to have cost $280. 31c. As of January 31, FDI had completed 6ex of the deliveries for the customer who paid in advance on January 20. 31d. Accrue one month of interest on the bank loan. Yearly interest is determined by multiplying the amount borrowed by the annual interest rate (expressed as 0.05). For convenience, calculate January interest as one-twelfth of the annual interest. Assume the van will be used for 4 years, after which it will have no value. Thus, each year, one-fourth of the van's benefits will be used up, which implies annual depreciation equal to one-fourth of the van's total cost. Record depreciation for the month of January, equal to one-twelfth of the annual depreciation expense. 31f Salaries earned by employees for the period from January 16-31 are $1,489 per employee and 31e. hanan 2 31g. WILL ve pulu un rerudy 3. Adjust the prepaid asset accounts (for rent and insurance) as needed. Part 2 of 5 C4-6 Part 2 ints 2-o. Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions January 1-25, adjusting entries of January 31. 2-b. Prepare an unadjusted trial balance at January 31. eBook Print eferences Complete this question by entering your answers in the tabs below. Req 2A Req 28 Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions January 1-25, adjusting entries of January 31. Cash Accounts Receivable Beg Bal Beg Bal Reg 2A Req 2B Prepare an unadjusted trial balance at January 31. FAST DELIVERIES, INC. Unadjusted Trial Balance Debit Credit Account Titles Cash Accounts Receivable Supplies Prepaid Insurance Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Deferred Revenue Notes Pavable long term + 2 of 5 ats eBook Prepaid Insurance Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Deferred Revenue Notes Payable (long-term) Salaries and Wages Payable Interest Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Supplies Expenses Depreciation Expense Interest Expense Totals Print eferences $ 0 $ Req 2A